The Driving Tax

[markster]

Washington lawmakers are kicking around a new idea to help raise funds to fix our highways and infrastructure: a national driving tax charging motorists by the mile.

A driving tax could either replace the current 18.4 cent a gallon federal gas tax or, possibly, add to it.

Because greater fuel economy is letting motorists drive more miles using less gas, the current gas tax that funds the federal government's efforts to build and maintain highways isn't generating enough money.

...

That would cost the average driver of a Toyota Camry, which gets about 380 miles per tank of gas, about $3.40 per fill up -- roughly the same as the current gas tax.

But it could also be quite a bit higher.

The $35 billion or so generated each year from the federal gas tax hasn't been enough to cover all the nation's road needs. Between 2008 and 2010 the federal government had to supplement the Highway Trust Fund by an additional $30 billion, according to the CBO report.

Bolded for the most interesting fact of the article.

As for the concept of the tax, I generally agree with the main criticism:
It's a horrifically bureaucratic replacement for a gas tax that basically does the exact same thing. And in fact creates another problem in that it disincentivises high fuel efficiency. If high fuel efficiency is a "problem", then maybe you should just raise the gas tax.

[mpd618]

And in fact creates another problem in that it disincentivises high fuel efficiency. If high fuel efficiency is a "problem", then maybe you should just raise the gas tax.

High fuel efficiency is its own incentive, though certainly a carbon tax on gas would be appropriate. But a driving tax gets closer to the actual use of infrastructure -- regardless of fuel efficiency, the amount driven is a pretty solid measure of how much you're using the public roads.

Congestion pricing is probably the more reasonable sell.

[IEFBR14]

In Canada fuel taxes are about 50% higher than in the US. ("About" because the numbers vary by state/province and even by city in Canada.) And Canada's fuel taxes are a fraction of what Western Europe pays. So there's lots of room to raise fuel taxes in the US and Canada, if only that was politically possible.

But, of course, it's not.

Based on that, while I think higher fuel taxes are needed in both Canada and US, I really don't see how a driving tax would be any more palatable, especially now when pump prices are at record highs.

[KLM]

I wouldnt introduce driving tax ,that would be last resort. Why not introduce certain days in week that only cars with even license plates ( or odd) can access certain areas
( i.e. downtown).

For fuel efficency I find very interesting that difference between ( i.e. Altima 2001 vs 2011) is only 1 liter is you are driving on hwy.

Average gas price in Europe is around 1.5 euros but public transit is way to advanced in comparison to Canada.

Quality of gas in Ontario is terrible!

[mpd618]

I wouldnt introduce driving tax ,that would be last resort. Why not introduce certain days in week that only cars with even license plates ( or odd) can access certain areas ( i.e. downtown).

I don't see why this is any way preferable.

[IEFBR14]

I wouldnt introduce driving tax ,that would be last resort. Why not introduce certain days in week that only cars with even license plates ( or odd) can access certain areas ( i.e. downtown).What does this accomplish that a congestion charge for everyone (like London, England) can't or doesn't?

It also seems unworkable. Suppose I don't normally drive downtown but need to occasionally. Am I supposed to make appointments downtown only when my car's license permits it? What about in an emergency situation?


For fuel efficency I find very interesting that difference between ( i.e. Altima 2001 vs 2011) is only 1 liter is you are driving on hwy.I don't understand your point. In any case government-mandated fuel efficiency ratings are notoriously inaccurate. They depend heavily on how the vehicle is driven, speed, acceleration, brake use, etc.

[KevinL]

Congestion fees make the most sense to me - the heaviest-used roads generate the heaviest returns.

[.FLH.]

Congestion fees make the most sense to me - the heaviest-used roads generate the heaviest returns.

So we should make them Toll Roads then. Put those camera's up like on the 407.

[mpd618]

So we should make them Toll Roads then. Put those camera's up like on the 407.

If the technology of the 407 was used on public limited-access highways with the purpose to maximize flow? Yes please. That's the easiest place to do it and where it can bring massive economic benefits through decreased congestion.

Things would be so much easier if Highways 8, 401, 427, and the Gardiner were always freely-moving, even during peaks. The flip side, of course, is that those used to horrifically time-wasting commutes would have the choice between paying some money to have a smooth ride in their own car or taking transit - which would become substantially more viable in such a scenario.

[KLM]

What does this accomplish that a congestion charge for everyone (like London, England) can't or doesn't?

It also seems unworkable. Suppose I don't normally drive downtown but need to occasionally. Am I supposed to make appointments downtown only when my car's license permits it? What about in an emergency situation?

I don't understand your point. In any case government-mandated fuel efficiency ratings are notoriously inaccurate. They depend heavily on how the vehicle is driven, speed, acceleration, brake use, etc.

you seem very confused for a transportation moderator. first you want to tax everything on wheels ( especially on 4) without even trying other solutions for traffic regulation. All service vehicles ( police,fire, ambulance) do have access to those restricted areas ,so there is no need to question something like that.

guys be careful what you wish charging tolls on highways.It would make utter mess on local streets and regional roads. Not to mention trucking companies would pass those tolls onto consumers.

My point for fuel efficiency over the 10 year period improved only 1 liter per 100 km.

Of course there is no fuel economy if you speeding like Schumacher on 401.

[bcwessel]

you seem very confused for a transportation moderator. first you want to tax everything on wheels ( especially on 4) without even trying other solutions for traffic regulation. All service vehicles ( police,fire, ambulance) do have access to those restricted areas ,so there is no need to question something like that.

I believe by "an emergency situation" IEFBR14 was referring to emergencies of a personal nature, and not emergency vehicles per se.


guys be careful what you wish charging tolls on highways.It would make utter mess on local streets and regional roads. Not to mention trucking companies would pass those tolls onto consumer.

This has been a common refrain against congestion and toll charges, but the actual experience of places that have successfully implemented toll and congestion pricing suggests otherwise. What actually tends to happen is that more people spend more time thinking about the trips that they choose to make, and inevitably determine that some trips are worth the cost, some trips are not worth making at all, and some trips are only worth making via alternative transit modes.

As to the notion that trucking companies will pass on the added costs of shipping to customers, this may in fact be true. However, it is also true right now as trucking companies (and other vehicles primarily using road space as a means of facilitating commerce) accept public subsidies in the form of free public infrastructure upon which they conduct their business. Tolling is just a more equitable, effective way of determining who should pay what in terms of road construction and maintenance. Mass transit already has this built into the cost by way of charging rider fares.

[mpd618]

guys be careful what you wish charging tolls on highways.It would make utter mess on local streets and regional roads.

Well, right now it's a mess on the highways. If you can make them work, you can move far more people than any regular arterial.


Not to mention trucking companies would pass those tolls onto consumers.

That sounds perfect! Time-sensitive goods can get there faster, at a price, and less time-sensitive goods can travel off-peak. If the congestion charges are used to maintain the roads instead of general taxes, all the better.

[KayDubya]

I'm all for fewer cars on the roads but let's remember most people, a huge majority, drive. A tax grab like this will have a huge effect on families and the middle class.
You want to get people mad, propose higher taxes on drivers because they aren't already being gouged enough at the pumps by oil companies and governments and don't give me this "it's more expensive in Europe" garbage. I don't live in Europe, I don't work in Europe, I don't drive in Europe so I don't care how much gas costs in Europe. I guaranty there are no Europeans today saying "thank god we don't have cheaper gas like they do in Canada."

Could you imagine if the Ontario Liberals came up with a plan like this? Dalton would be run out of Queens Park within hours of proposing such a ludicrous idea.

[plam]

I'm all for fewer cars on the roads but let's remember most people, a huge majority, drive. A tax grab like this will have a huge effect on families and the middle class.

Seems to me like higher gas prices are coming anyway. If we can deal with them proactively, we'd be better prepared for them, rather than improvising at the last minute.

[KayDubya]

That sounds perfect! Time-sensitive goods can get there faster, at a price, and less time-sensitive goods can travel off-peak. If the congestion charges are used to maintain the roads instead of general taxes, all the better.Here's the thing, if you've got it a truck brought it. There is nothing you've ever owned, eating, lived in, looked at that didn't get to where it is by truck, nothing!
Do you think trucking companies aren't under serious time constaints? The more frieght each truck you own moves the more money you make. The world has changed. Almost every thing is time sensitive now. Once it's on the truck the trucking company wants it off the truck as soon as possible. The warehouse gets paid as soon as they touch your product so they want to receive it as soon as possible and the consignor is paying the tab for both trucking and warehousing so they want it into their own system quick. Not only do you make no money off of prodcuts sitting in a warehouse, it cost you money either for outside storage or to pay for your own warehouse facilities equipment and personal.
Yes many, many things still go to warehouses and distribution centres but trust me most of it isn't sitting there long.
Higher taxes for trucking, now there's a way to put people out of work fast.

[KayDubya]

Seems to me like higher gas prices are coming anyway. If we can deal with them proactively, we'd be better prepared for them, rather than improvising at the last minute.Higher taxes on already rising prices will not help. I still need my car regardless of the price of gas so what you're doing is taking the money I would have put back into the economy and giving it to the government.
Want me off the road, try incentives not punishment for being a hard working contributing member of society.

[KLM]

Here's the thing, if you've got it a truck brought it. There is nothing you've ever owned, eating, lived in, looked at that didn't get to where it is by truck, nothing!
Do you think trucking companies aren't under serious time constaints? The more frieght each truck you own moves the more money you make. The world has changed. Almost every thing is time sensitive now. Once it's on the truck the trucking company wants it off the truck as soon as possible. The warehouse gets paid as soon as they touch your product so they want to receive it as soon as possible and the consignor is paying the tab for both trucking and warehousing so they want it into their own system quick. Not only do you make no money off of prodcuts sitting in a warehouse, it cost you money either for outside storage or to pay for your own warehouse facilities equipment and personal.
Yes many, many things still go to warehouses and distribution centres but trust me most of it isn't sitting there long.
Higher taxes for trucking, now there's a way to put people out of work fast.

I agree, especially with automotive industry where everything is Just in Time. Goods sitting at warehouse is only a waste.Lost money.

Driving tax could be defined as commodity. But as every commodity high demand ,prices would be high.

But then that opens another issue: will people only with money be able to go places they want ,whenever ? Isnt this beginning of well we have tax for driving ,next thing is tax for health care ( for example if you want immediate admission at hospital you have to pay for it)instead being free and wait countless hours in waiting room -lol almost reminds me on highway too , free - be in traffic and wait , toll -speed.

[bcwessel]

Higher taxes on already rising prices will not help. I still need my car regardless of the price of gas so what you're doing is taking the money I would have put back into the economy and giving it to the government.
Want me off the road, try incentives not punishment for being a hard working contributing member of society.

What about your taxes (and mine) that go toward the billions of dollar in subsidies that keep Canadian gas prices significantly lower than any other country (excluding places like Venezuela, which keep their prices low by owning their domestic oil and gas industries outright)? I am a hard-working contributor to society, and I do so on foot, on a bike, and on the bus.

[mpd618]

Once it's on the truck the trucking company wants it off the truck as soon as possible.

Try doing that on Highway 401 at rush hour! Time is money.

And I'd rather pay the shipping costs of things I buy as part of the price, instead of as general road taxes. That way the appropriate economic incentives to take into account shipping costs are built into the consumer price itself.

[IEFBR14]

I still need my car regardless of the price of gas so what you're doing is taking the money I would have put back into the economy and giving it to the government.
The government will at least use that money to build more transportation infrastructure. That may be more roads, more maintenance of existing ones or building new rapid transit facilities. All of these will help the economy, not only by creating jobs directly but by helping to make us all more productive. By contrast higher gas prices due to increases in the world price of oil will benefit mostly oil company executives, via higher salaries and bonuses, and their shareholders, via higher dividends. Worse many, if not most, oil industry shareholders are foreign, so that dividend money leaves Canada where it does us absolutely no good.

But in any case, suppose you commute 10 km each way each day. That's 20 km x 200 workdays = 4000 km/year. Suppose your mid-efficiency car burns 10l gas per 100 km, that's 400l per year. At $1/l that's $400 per year. Put in perspective, that's about 1/10 of what you pay in depreciation on the vehicle or about 1/3 of what you pay in insurance. A 50¢/l increase in gas would add $200 to the cost of commuting a year. That's hardly an onerous increase.

Now you'll say you drive more than 10km each way to get to work and therefore the cost of gas affects you more. Perhaps it's time to rethink the viability of commuting long distances by car and look for alternatives, e.g. move closer to work, change jobs so they're closer to home, use alternative means of transportation like public transit, investigate the possibility of working from home a few days a week, etc.

The people who drive 50km or 100km or more each day to get to work should realize that society doesn't owe them cheap gas. The economics may have worked when gas was cheap. But gas is no longer cheap. The increases you see today are merely a portent of what awaits in the future as both as oil prices and taxes increase. Just as Canadian manufacturers have had to adapt or perish as the result of Chinese competition and the rise of the loonie vs greenback, so will you. The choice is yours.

But whining about it is a total waste of time. Get over it.

[KLM]

Try doing that on Highway 401 at rush hour! Time is money.

And I'd rather pay the shipping costs of things I buy as part of the price, instead of as general road taxes. That way the appropriate economic incentives to take into account shipping costs are built into the consumer price itself.

what do you think ,maybe we should deliver our goods to stores and consumers via airplanes. just hook those skids with goods onto parachutes and wheeeeee here we go!!

no congestion on roads at all, right? come on lets be realistic here for once.

[mpd618]

what do you think ,maybe we should deliver our goods to stores and consumers via airplanes. just hook those skids with goods onto parachutes and wheeeeee here we go!!

no congestion on roads at all, right? come on lets be realistic here for once.

For the same reason a bread line is not a good way to allocate scarce bread, time-wasting congestion is not a good way to allocate scarce road space. If someone makes $30/hour and they can avoid an hour spent going nowhere on Highway 401 by paying $10, that's a win for economic productivity and that person in particular.

As for shipping - we should deliver via truck where it makes sense, via rail where it makes sense, and not ship things so damn far in general. I trust that if the currently externalized costs of congestion, road maintenance, etc. were to be included in the price of products, that the market would be able to figure out more economically efficient ways to do business.